30 april 2012 – trading update

Disappointing third quarter results have been reported by the company with production down by 7% during the period – a much lower figure than expected.  As a result, a net loss of US$9.4m was reported although the group did end the quarter to 31 March 2012 with cash balances of US$207m.  Although the first quarter is traditionally a difficult one, largely due to absenteeism following the Christmas and New Year holidays, this year was worse than normal and the result was not helped by operational and regulatory difficulties.  However, although the company may struggle in the short-term, looking further ahead there are better prospects and long-term holders should retain their holdings.  For now we reduce our recommendation to HOLD.